Playing the GCC Trend (Re-post)

October 7, 2009 by Saud

The year is just about to end, research analysts, fund managers and investors are studying their investments and the market to fully capitalize on the stock movements that will result for their year end performance. Now as most of us believe that the gloomy days are over, companies should post relatively good earnings compared to last year; but the question is, how good? This post might interest you if you believe in trend analysis or quants and believe that history does repeat itself. Just for the sake of clarity, I don’t. I like to dig deep in the company’s financials and management to get my answer, then reconfirm it with technicals and other means of analysis. But here it is for those of you who believe in them or just like me want to confirm your view.

This table has a collection of returns from different indices beginning Q1 2003 to Q3 2009. As you might noticed each country had a different trend in their Q4 performance, implying that Q4 is not necessarily the best quarter in terms of return.

Saudi Arabia: Q4 has been the most volatile, meaning that it is either the best or worst performer of the year.

Qatar: Q4 is the least volatile, its either the second best or third best performer.

Kuwait: Q4 is the least favorable, with the performance being the worst or the second to worst.

I know I have been harsh towards our beloved Kuwait SE in my last 2 posts! I’ll explain the details behind this negative outlook in a separate post soon.